Reconsidering financial remedies in WTO dispute settlement

Abstract

Enforcing international law remains problematic: what happens if a sovereign state refuses to comply with its obligations, even after an international adjudicatory body has ruled in its disfavour? The solution offered under the World Trade Organization (WTO) system has been to authorize the prevailing member in the settlement of a dispute to retaliate, if and when the respondent member fails to implement a panel or Appellate Body ruling. Such retaliation can take the form of additional restrictions on imports of goods or services, or suspensions of intellectual property rights. Our article examines whether fairer and more effective means of ensuring compliance could be inserted into the WTO system. First, existing remedy systems are outlined, comparing general public international law with the current WTO system. We posit that the objective of both is rule compliance and take issue with the recent theory of efficient breach. Further support is drawn from the EU compliance regime. This is followed by an examination of the advantages of introducing financial remedies in WTO dispute settlement as well as a refutation of potential objections. The main elements of the subsequent proposal relate to the calculation, term, retro-activity and beneficiary of financial payments as a remedy. The Author 2013. Published by Oxford University Press. All rights reserved., Oxford University Press.